False Statement 9: ETP fails to commit to clear economic and labour prescriptions to address low level of wages.
Response: The 12 National Key Economic Areas will create additional 3.3 million incremental jobs that will move the workforce upwards into the middle and higher income brackets. The overall impact of the ETP will contribute to a significant growth in the job market.
As mentioned, the ETP will facilitate consistent movement from low to higher income brackets across the board. It anticipates for 600,000 people to be removed from the lowest income bracket of less than RM1,000 per month, one million will move into the RM1,000-RM2,000 bracket, 1.3 million into the RM2,000-RM4,000 bracket, 1.5 million into the RM4,000-RM7,000 bracket, 900,000 into the RM7,000-RM10,000 bracket and 400,000 into the more than RM10,000 bracket.
Under the ETP, the government’s role will be in facilitating economic growth, with market forces determining wages. Increases, whether through union-led negotiations or non-union, are always determined by factors such as inflation and the consumer price index (CPI). The government has indirect influence through upgrading worker skillsets, not by directly setting wage levels.
Various initiatives are already in place to address the question of minimum wages in Malaysia. The National Wage Consultative Council (NWCC) was set up in September 2011 pursuant to the National Wage Consultative Council Bill which was passed in Parliament in July 2011. The NWCC is tasked to recommend the minimum wage taking into account various sectors, regions and jobs. The Council, comprising economists, academicians and industry experts presented its recommendations on the definition of minimum wage to Cabinet in December 2011. A public announcement is expected to be made soon.
False Statement 10: Due to weak policy and poor governance, the economic growth of Malaysia has been limited to an average of 4.3% between 2000 and 2009; a far cry from the average 9.2% growth enjoyed between 1990 and 1997. Our pace is relatively slow compared to the growth of our neighboring countries.
Response: In the first nine months of 2011, the Malaysian economy has grown by 5.8 percent – a clear indication that our economy is moving despite softening global conditions and the Euro-crisis. To put things in perspective, in 2010, our GDP grew at 7.2%. The projected GDP growth for 2012 is at 5-6%, giving us reason to be optimistic, as contributions to the GDP from the increase in NKEA activity, in particular, from the OGE NKEA, is expected to bear us results by the year 2013.
In the 1990s Malaysia enjoyed an extended period of rapid growth as it transitioned towards an upper-middle income economy, this is characteristic as countries move up from lower-middle income economies, as we can see from our neighbours such as Indonesia and Vietnam. As a country’s income moves up, competition for growth becomes fierce, this is evident in Singapore, which expects to grow between one and three percent in 2012.
Since 2000, the country has slowly recovered from the 1997 Asian Financial Crisis and we are now a middle income economy. We must acknowledge that as a middle income economy, competition for growth is now fiercer. The ETP was designed to propel Malaysia into a high income nation status by 2020.
To achieve our target of becoming a high-income nation by 2020, the ETP has defined the goal of a six per cent average GDP growth per annum. The ETP also defines the need to have focus in growing the economy – on top of putting in place broad-based policies to allow the economy to ‘grow organically’. This is why there are 12 NKEAs – priority sectors, selected for their added advantage and catalytic potential.
We are all aware that the oil and gas sector is a key contributor to towards the Malaysian economy. In 2009, the sector contributed to 20 percent of the country’s economy. However, in the last decade growth in this sector has been relatively slow.
In recent months there has been significant investment under the sector: Shell and Petronas recently signed a heads of agreement for two 30-year production-sharing contracts (PSCs) for enhanced oil recovery (EOR) projects offshore Sarawak and Sabah. They are expected to invest some RM36 billion. Earlier in the year, Exxon Mobil had committed to invest RM10 billion in EOR activities as well.
About ETP Malaysia
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